Schools sign off on TIF

September 24, 2013

EAST LIVERPOOL - The city school board voted Monday night in favor of a resolution authorizing implementation of a Tax Increment Financing (TIF) plan that will facilitate the development of two downtown buildings into a trade school.

Initially, there was some confusion among board members about the proposal, particularly over the length of the TIF agreement.

While the city - which had asked for the agreement - had proposed a 100 percent tax exemption for 30 years, the school board's resolution called for the same rate not to exceed 10 years.

Board Vice President Bob Estell said he did not understand the "lack of discussion" on the issue, saying, "The city clearly asked for 30 years and we have on the agenda 10 years, and board members don't know why it was changed."

Estell's son Ryan is the city's service-safety director and has been involved with the economic development plans that include the TIF agreement.

The board member said the agreement involves developing two downtown buildings for the New Castle School of Trade (NCST) and that, if the TIF is not put into place for 30 years, "They don't intend to come. If the vote is for 10 years, we might as well vote 'no' because they won't come. Why was the decision made to change from 30 to 10 years without talking to the board?"

Superintendent James Herring said that, in a telephone conversation between himself, Treasurer Todd Puster, board President Janice Martin and attorneys, Better City LLC said the district had to agree to 10 years but in a conversation Friday with Better City's Matthew Godfrey, he said it had to be 30 years.

Better City LLC is the economic development firm hired by the city.

Asked by board member Richard Wolf who drafted the legislation, Herring said the district's attorney, Adam Miller.

Wolf pointed out that the school district also encompasses Liverpool Township and a portion of St. Clair Township and it is possible officials there may not favor the tax agreement.

Adam Hughes, an economic development professional from Better City, explained that the school district faces two challenges: Demographics that show 30 percent of its student population is at the poverty level, providing a difficult environment for teachers to excel, and a stagnate property tax base with only about 16 percent of its revenue generated by property tax.

The reason, Hughes pointed out, is the exodus of business from the downtown and that by re-developing the downtown, the district can increase its operating budget.

He said while the city has beautiful architecture, much of is blighted and will require substantial capital to renovate. Hughes said Better City has looked at every incentive available to help bring business back that will draw people downtown and believes the historic tax credit program will work to this end.

The TIF will encompass only the two buildings earmarked for the NCST, meaning no other tax revenue will be affected.

Hughes emphasized the district receives less than $5,000 annually in property taxes from the two buildings and will continue to receive that revenue. With the "public purpose TIF," payments instead of taxes (PILOT) will be paid by the NCST which will, in turn, be returned to the city for reinvestment in redevelopment.

Wolf was concerned that the resolution stated the PILOT revenue can be used for "other purposes," but attorney Don Mottley, representing the district by teleconference, said that means capital improvements that benefit the project.

Hughes emphasized that one of the two buildings in question is already condemned, and if not used for the NCST project will be torn down, meaning the district will lose that tax revenue anyway.

"This stabilizes two buildings that will otherwise sit vacant. This is their last chance," he pointed out.

He urged the board to consider the economic impact of having an estimated 350 students attending a school in the downtown, as well as 20 full-time teachers and 12 part-time teachers.

Wolf said all 350 students going to the school will not come from East Liverpool, nor will they stay here, meaning much of the estimated economic boost will go to other communities, saying, "East Liverpool is the dumping ground for the tri-state area. It's tragic, but it's a fact."

Hughes said, however, the students will be in the downtown, utilizing restaurants, gas stations and other businesses.

"This is your community. It needs your help," Hughes said, adding that Better City has explored every revenue source possible and "this is it."

Board member Scott Dieringer complained, "It's crunch time everything we do. Why aren't we privy to this information? We should have had this months ago."

An East Liverpool graduate, Estell said that since he graduated, students have continued to leave the community.

"I'm tired of living in a box. We are not just East Liverpool. We are the townships, Wellsville, Midland. We are a community and this benefits the community. We're going to get students from outside - good. We'll be bringing customers into town," Estell said, amending the motion to change the 10-year agreement to 30 years.

The board voted, with Wolf opposed, in favor of the resolution.

In the audience were Mayor Jim Swoger, city Planning Director Bill Cowan, Councilman Scott Barrett and some members of the committee working with Better City on the development plans.